(a)

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Terms Used In Tennessee Code 4-28-109

  • End date profit share percentage: means a fee paid to the state by a qualified TNInvestco as provided in §. See Tennessee Code 4-28-102
  • Investment period: means the period January 1, 2010, through December 31, 2019. See Tennessee Code 4-28-102
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Minority-owned business: means a business that is wholly owned, or at least fifty-one percent (51%) of the assets or outstanding stock of which is owned, by one (1) or more individuals who are members of any racial or ethnic minority within the state and whose management and daily business operations are under the control of one (1) or more members of any racial or ethnic minority within the state. See Tennessee Code 4-28-102
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Profit share percentage: means a fee paid to the state by a qualified TNInvestco as provided in §. See Tennessee Code 4-28-102
  • Program end date: means December 31, 2024. See Tennessee Code 4-28-102
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • TNInvestco: means a partnership, corporation, trust or limited liability company, whether organized on a for-profit or not-for-profit basis that completes the application process in §. See Tennessee Code 4-28-102
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(1)

(A) Prior to or on the program end date, at any time that the TNInvestco makes distributions, other than qualified distributions or distributions representing repayments of capital contributions, to its equity investors, the qualified TNInvestco shall pay to the state the profit share percentage. After the program end date, at any time that the TNInvestco makes distributions, other than qualified distributions or distributions representing repayments of capital contributions, to its equity investors, the qualified TNInvestco shall pay to the state the end date profit share percentage. Any such payments shall be deposited into the general fund until such time as the department of finance and administration certifies that the total amount of payments deposited in the general fund equals the total amount of revenue forgone pursuant to the credits used as provided in § 4-28-103. Any payments made in excess of the amount of revenue forgone shall be deposited into the Tennessee rural opportunity fund and the small and minority-owned business assistance program fund to further support the state’s economic development efforts.
(B) The department shall obtain all necessary information from each TNInvestco to support the state’s profit share percentage or the end date profit share percentage. Information provided to the department pursuant to this section shall be kept confidential due to the proprietary nature of such information.
(2) After the department of finance and administration has provided its certification pursuant to subdivision (a)(1), any additional state revenue generated and deposited into the general fund as a result of this chapter through sales and use taxes, franchise and excise taxes, business taxes or any other source of revenue shall be identified by the department of revenue. The amount of this additional revenue shall be certified by the department of revenue on an annual basis and an amount equivalent to the certified amount shall be transferred from the general fund and seventy-five percent (75%) of such amount shall be transferred to the Tennessee rural opportunity fund and twenty-five percent (25%) of such amount shall be transferred to the small and minority-owned business assistance program fund.
(b) Following the seventh anniversary of the fund, investment returns (profits and the portion of the base investment amount) may be distributed as liquidity permits; provided, that no more than twenty-five percent (25%) of the TNInvestco’s base amount may be distributed in any one (1) year until the end of the investment period, at which time all of the fund’s proceeds may be distributed as liquidity permits.
(c) The TNInvestco and the state shall structure the qualified distributions and final payments in a manner that minimizes any related federal tax obligation. To the extent that the profit share distribution to qualified TNInvestco investors is less than the state’s share, pursuant to the profit share percentage, due to federal income tax liabilities, the final payments may be adjusted to equalize the post-tax profit share payments made during the investment period.
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